Elephant In The Room - Debt

"Over the past two centuries, 51 out of 52 countries that reached sovereign debt levels of 130% of GDP ended up 'defaulting' [within 0 to 15 years], either through devaluation, inflation, restructuring, or outright nominal default."

US debt has grown six times in the last 25 years, whereas US GDP has grown three times. Consequently, the US debt-to-GDP has doubled from ~57% to ~120%

Our View On President Trump – Posted June 2024

https://x.com/riteshmjn/status/1806667412596740191?s=46&t=C3rli2FHgt3dUJcWQCNaZg

World Does Not Have A Hegemon - Global Defense Spending To Rise

No Appetite For Austerity: Governments Will Have to Give In Or Will Be Voted Out

3% Is The New 2% - No Option Other Than To Inflate Away

Bonds - Certificate Of Confiscation In Western World

AI Keeping The US Economy Afloat But Focus On Electricity

IRAQ..IRAN..SYRIA..RUSSIA.. Now VENEZUELA

Bitcoin & Stablecoin vs Gold – Western Bloc vs BRICS

China Understood In 2013… ROW Understood It In 2022

Vaults In Shanghai…Hongkong….Saudi Arabia

https://x.com/andreassteno/status/1970938624855375884?s=46&t=C3rli2FHgt3dUJcWQCNaZg

True For US…True For Canada…

US vs China

India -The Problem Of High P/E And Low Nominal GDP

How To Invest In A Brave New World

Conclusion

  • 3% is the new 2%. Inflation is here to stay; there is no turning back.
  • AI is a Bubble, but if you want to play this bubble, then play through "Picks and shovels".
  • The US is no longer willing to bear the burden of policing the world and sharing its GDP with the rest of the world; the world is rearming, and military spending is now on the rise.
  • India's Nominal GDP settling below double digits is not good news for Indian equities. There are better stories out there.
  • The Western World is facing sovereign debt crisis and they would be inflating away their debt.
  • Lower bond yields and higher asset prices are a matter of "NATIONAL SECURITY" in the US.
  • Focus on assets that benefit from Nominal GDP over real GDP and pick High fixed cost businesses over high variable cost businesses.
  • Gold is back in the monetary system as a neutral reserve asset.